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Michigan Auto Parts Maker Defies Downturn

ADAC Automotive is expanding facilities despite lackluster auto industry; company provides for the Big Three as well as Honda, Nissan and Infiniti.

MUSKEGON, Mich. (AP) — Conventional wisdom scoffs at the notion of an auto parts manufacturer doing well in Michigan amid reports of the struggles of the state's auto industry.
However, ADAC Automotive — a major supplier of plastic auto parts with two major facilities in Muskegon — is hitting on all cylinders. It is expanding its production plant in the Port City Industrial Park to include a 50,000-square-foot warehouse and distribution center.
The secret to ADAC's success can be found in its customer list.
The company not only produces interior and exterior door handle assemblies, light bar trim pieces and license plate tubs for the Big Three — Chrysler, Ford and General Motors — but also supplies Honda, Nissan and Infiniti.
Despite what Michigan residents continually hear about the state's auto industry, people continue to buy and drive new vehicles. Although the domestic leaders are downsizing, foreign companies continue to expand North American operations.
Grand Rapids-based ADAC has continued to build its business by diversifying its customer base, according to Peter Hungerford, director of production systems for the company.
''We've grown smart,'' Hungerford said. ''Many companies in the late 1990s got into businesses that were not their core. They became overextended. We've remained profitable and stayed with our core. We have just been able to diversify our customer base.''

ADAC, which opened its first Muskegon plant in 1990 with 30 employees, now has about 350 employees in two nonunion plants, Hungerford said.
The Muskegon plants represent more than 50 percent of the company's entire production, with other facilities in Grand Rapids and Saranac. As a privately held company, ADAC does not release sales figures.
The company grew on the power of contracts with Ford for door handles for the former Taurus and the Explorer. ADAC's relationship with Honda expanded the company's customer base beyond the Big Three, Hungerford said.
ADAC has been able to compete for new business based upon its body color matching capabilities, he said. The company has developed its own ''rotational robotic'' painting methods that have provided the quality and consistency many of the foreign automakers demand, Hungerford said.
The other advance that has kept the company's orders growing and the Muskegon plants near capacity is ''inline vehicle sequencing,'' in which ADAC ships bar-coded parts in the order that they are needed on the automaker's assembly line. A box of door handles will be shipped in the specific color sequence needed.
ADAC produces millions of parts annually at its Muskegon facilities, which have 36 plastic injection molding machines and capabilities of painting up to 80,000 parts per day. Until recently, all shipping and distribution was centralized in Grand Rapids.
As a cost-saving and efficiency move, parts will soon be directly shipped to customers out of the new Muskegon warehouse under construction, Hungerford said. The warehouse is expected to be in operation in early 2008, he said.
Triangle Construction Co. is the general contractor for the more than $3 million investment in the warehouse expansion. The company has received a 50 percent industrial tax abatement from the city of Muskegon for 12 years on real property and six years on personal property.
No new jobs are being promised by the company for the warehouse expansion, but employment is expected to remain stable, company officials have told the city.
''Our ownership is committed to West Michigan and Muskegon,'' Hungerford said of the new local investment. ''In Muskegon, we have great employees who work hard every day. We have had a great partnership with the city since the early 1990s.''
City manager Bryon Mazade has coordinated city services with ADAC since it first began operations in Muskegon.
''ADAC shows you what happens when you put together a quality company and the quality workers you find here in Muskegon,'' Mazade said.
As for the future, ADAC plans to continue to bolster operations through lean manufacturing improvements and beginning to develop the next generation of products and technologies such as ''passive entry'' door handles, Hungerford said.
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